Illinois Joins R3, Unveils Expansive Blockchain Support Plan

While much of the US is working to piece together a patchwork of blockchain regulations, Illinois unveiled a sweeping plan yesterday that would see the state implement blockchain solutions across multiple government agencies.

Revealed at the DC Blockchain Summit, hosted by the Chamber of Digital Commerce, the multi-agency, public-private partnership aims to connect much of the state's infrastructure using a shared, distributed ledger.

Beyond just a play to streamline bureaucracy, the Illinois Blockchain Initiative's plan is designed to turn the native home of derivatives and the center of the US mercantile exchange into a fountainhead from which other states might also work to adopt blockchain.

In conversation with CoinDesk, the Illinois Blockchain Initiative’s blockchain business liaison, Jennifer O'Rourke, explained how her state government’s goals were both lofty, and simple.

O'Rourke said:

With future goals that include moving school degrees, health provider registries and energy credits to a blockchain, O'Rourke also announced that the State of Illinois had selected an industry partner.

O'Rourke revealed the first state agency will now join the R3 banking consortium, a distributed ledger effort powered by participation from more than 80 global banks.

Further, the state revealed it has formed two of its own internal blockchain entities.

O’Rourke formally announced the creation of the Illinois Blockchain Legislative Task Force, previously reported by CoinDesk. The Task Force headed by state legislator, Michael Zalewski will be a 12-person group dedicated to researching the impact of blockchain on society.

Additionally, O'Rourke revealed the creation of an Illinois advisory committee that will focus on developing a strategy for implementing blockchain solutions. "We recognize the importance of building out that economic development and ecosystem support," O’Rourke said.

But O’Rourke admitted bringing together so many government groups dedicated to blockchain wasn't an easy task. (The group of six government agencies behind the Illinois Blockchain Initiative includes the Illinois Department of Commerce, the state IT department, and two regulatory bodies.)

Far from being naturally aligned, O’Rourke said the trick to bringing everyone together was good, old-fashioned "elbow grease".

"When we saw that there was a bite on the line," she said, "we were ready to follow through with that immediately and bring them in. It was almost like detective work."

While New York has Wall Street, and California has Silicon Valley, Chicago is known as the "birthplace of derivatives", and for being home to the two largest personal insurance companies in the US.

But those aren’t the only industries the initiative has in its sights. O’Rourke says she and her team are working closely with companies from both the supply chain and biotechnology industry.

"They’re all actively thinking about it, they’re doing proofs of concept, they're doing pilots internally," said O’Rourke.

In addition to the work that is focused on helping the government and businesses better understand how a distributed ledger can save time and increase transparency, O’Rourke revealed three educational ventures.

The first is the Chicago Blockchain Center — originally founded two years ago as the Chicago Bitcoin Center by Matthew Roszak of blockchain startup Bloq — which will now serve as a state educational facility.

Also, the State of Illinois will host a quarterly seminar series in partnership with cryptocurrency advocacy firm, Coin Center, to address concerns about banking digital currency, which has traditionally been a huge stumbling block for cryptocurrency-related startups.

"We recognize that this is a very opaque space with a lot of questions around it," said O’Rourke. "And we want to be part of the conversation to start getting to the bottom, or at least having a better dialogue about what this means."

The Illinois Department of Financial and Professional Regulation (IDFPR) last year unveiled cryptocurrency guidance designed to make it one of the more friendly states to bitcoin and other cryptocurrency users.

In addition to the educational work with Coin Center, the Illinois Blockchain Initiative announced it has joined the Blockchain Education Network, and in partnership with the group, it plans to open up the state's Microsoft Azure blockchain sandbox for an upcoming blockchain hackathon.

That wasn't all though, O’Rourke also revealed details about five integrated government pilots, one of which is nearing completion.

Built in partnership with the Cook County Recorder of Deeds, the previously revealed proof of concept to facilitate the sale of property on a blockchain would signify the first blockchain real-estate deal in the US, she said.

Appropriately enough, it is exactly this kind of inter-government cooperation that blockchain might one day facilitate on a large scale, according to the Illinois department of finance's deputy director of strategy, Cab Morris, who also spoke with CoinDesk following the event.

Morris said that such government agencies around the US should look at what they do and ask what is at the "core" of their "business model", and how can a shared, immutable ledger improve that product?

"To make government a little leaner, more efficient, automated," said Morris, "but also more personalized and tailored to each specific citizen, I have come to think is the eventual opportunity that we can capture here."

O’Rourke put it a different way:

Images via Michael del Castillo for CoinDesk